July 8, 2014
The Zuffa-New York lawsuit will have to wait a little longer for resolution as the Court has granted an extension of time request by New York to file its Summary Judgment motion. The new deadline is for July 31st with the last responsive briefing not due until September 4, 2014.
In a letter to the Court on June 25, 2014, the New York Attorney General requested an extension of time as one of its lead attorneys on the case was leaving the office on July 3rd. In addition, New York indicated that key non-party witnesses were out of the office and could not be contacted. It appears that these witnesses would provide declarations that would support New York’s Motion for Summary Judgment which, if the Court granted, would effectively end the lawsuit. New York also argues that Zuffa’s Complaint is long and two weeks to respond to Zuffa’s Response to its moving papers would not be enough time. Zuffa opposed the extension as you can see the letter to the Court here.
The Court granted the Motion which allows the filing of the motions to occur on July 31st instead of the original July 3rd Court order. Response to the Summary Judgment will be August 21st and New York’s Reply briefing would be due on September 4th.
It always makes me laugh when I read that attorneys need more time to respond to things that they want. Yes, it’s cynical but New York wants to file a motion, and now tells the Court that it doesn’t have sufficient time to do it per the parameters the Court set. Also, here’s a bunch of other excuses which include the revelation that Zuffa’s lawsuit is quite long. They should have known this, right? I have been in situations where the Court just said, “Tough.” And, you have to stay up a little later to do things and make do. With that out of my system, the Court allowing the extension is probably fair considering it’s the first one that they requested. Both parties get an extra week to fashion responses to the motions.
As far as when these motions will be decided and if there will be a resolution to this case. Maybe next summer? At the earliest we probably would get a ruling by the end of the year or early 2015.
June 30, 2014
MMA Payout has obtained a copy of the lawsuit filed by promoters Main Events as it is suing the promoter for Adonis Stevenson for bowing out of an intended fight with Sergey Kovalev. The lawsuit centers around the involvement of boxing insider Al Haymon. It was filed last month with little occurring in the lawsuit so far.
The lawsuit was filed last month and has not seen much movement in the initial filing at this point. The plaintiff is New Jersey Sports Productions, Inc. which does business as Main Events. The promotion is owned by Kathy Duva. As MMA fans may recall, Duva filed a Declaration in Support of Bellator in the Eddie Alvarez lawsuit.
The defendants include Yvon Michel, his promotion, GYM; Golden Boy Promotions; Showtime Network, Inc. and boxer Adonis Stevenson.
To set the stage, Main Events’ Kathy Duva claims that it had an agreement for her fighter, Sergey Kovalev to face Yvon Michel’s promoted fighter Adonis Stevenson. The deal was allegedly sealed with emails in late January 2014 between Duva and Michel. The deal included a co-promoted fight on HBO which carried a $2.4 million rights fee. The fee was offered by HBO executive Peter Nelson which Main Events contends was accepted by Michel on behalf of his fighter.
However, Main Events learned that Al Haymon became involved and Main Events’ attorney sent a letter to Haymon confirming the Stevenson-Kovalev. Presumably, the letter was to prevent an anticipated breach on the part of Stevenson.
The Complaint paints Haymon as an individual with “a relationship with Showtime wherein certain promoters rely…for allocation of television dates and rights fees rather than negotiating those dates and fees directly with Showtime.” It also alleges that Haymon has an alliance with Richard Schaefer (then CEO of Golden Boy) and they had planned to “wrest control” of Golden Boy. As we know now, Schaefer and others have left Golden Boy and it’s not clear whether Schaefer and Haymon are entering into a venture together. The Complaint alleges that Haymon violates the Muhammad Ali Act as he acts as a manager or advisor to boxers despite not following the rules related to the Ali Act.
Main Events claims that Showtime interfered with the negotiations between HBO and the Kovalev/Stevenson fight despite Haymon pushing for a Stevenson-Bernard Hopkins fight with Showtime.
The legal claims:
Breach of Contract
Main Events claims that Stevenson’s management group, GYM, breached its contract to co-promote a bout between Stevenson and Kovalev.
Breach of Fiduciary Duty
Main Events claims that GYM breached a fiduciary duty premised upon the co-promoted agreement as the two sides were to have split revenue on the proposed fight. It goes on to claim that since the co-promotion is considered a joint venture, GYM breached a fiduciary duty to Main Events for not going through with the co-promotion.
Fraud by Stevenson’s Promoter
Main Events has sued Stevenson’s Promoter, Yvon Michel, personally for fraud as it is alleged that he represented to Main Events that it “had nothing to worry about” regarding the agreed Stevenson-Kovalev fight and Haymon’s involvement was a mere way to “increase the rights fees for the unrelated interim bout.” The interim bout that is being referred to was a fight in Montreal between Stevenson and Andrzej Fonfara. Stevenson fought Fonfara in late May on Showtime. In that fight, Stevenson hit the canvas once, but eventually won a decision over Fonfara.
Tortious Interference with Contract
Main Events claims that Haymon, Golden Boy, Stevenson and Showtime based upon the set of events, claims it had a deal for Stevenson-Kovalev, but the defendants interfered with that contract.
Interference with Prospective Economic Advantage
Premised upon the alleged agreement for a fight between Stevenson-Kovalev, Main Events contends that Haymon, Golden Boy, Stevenson and Showtime interfered with an existing contract for the fight and that there was “a reasonable expectation that plaintiff [Main Events] would have economically benefitted from the business relationship.” Essentially, Main Events claims that it would have benefited (and it would have) from the fight between their fighter and Stevenson. But there was interference which caused Stevenson to back out of the agreement.
This is another example of the competitive nature between HBO-Showtime and Top Rank-Golden Boy. Actually, here its Main Events. Since the lawsuit was filed, Schaefer has left Golden Boy and the move may impact this lawsuit as it relates to the accusations between the companies. The latest has a Summons issued to Schaefer in Laguna Beach, California. A pretrial conference that was to occur last week has been pushed to July 11th.
As for the legal maneuvering, it’s likely that Haymon, et al. will file a motion to dismiss the Complaint premised upon the argument that there was no binding contract between Main Events and GYM, and as such, there was no breach. Premised upon the fact that there was no breach, there would be no fraud by Michael or interference with a contract.
The lawsuit underscores the power of Al Haymon in the boxing industry. It’s clear that he has a powerful stable of fighters and has had working relationships with Showtime. As many know, Haymon advises Floyd Mayweather. Main Events alleges that Haymon acts as manager to his boxer which circumvents the Muhammad Ali Act which attempts to protect fighters. The Complaint does not delve into this violation as it is not a plead cause of action at this point. However, if discovery commences in this lawsuit, we may see allegations of specific violations.
It will be an interesting lawsuit to follow and MMA Payout will keep tabs on it.
June 26, 2014
ESPN reports that Golden Boy Promotions has requested arbitration against former CEO Richard Schaefer. According to the report, De la Hoya and Golden Boy are requesting $50 million in damages from Schaefer although no allegations have been reported as to the claim.
The case is being sent to private arbitration per the terms of Schaefer’s employment agreement with Golden Boy. It likely had a clause that if there was a disagreement, in lieu of filing a lawsuit, the parties would agree to go to arbitration which is theoretically faster and less expensive. Thus, no lawsuit and it is unlikely that the general public will not know much of the evidence and testimony unless it is leaked.
While we may not know the claims against Schaefer, the speculation that Schaefer and Al Haymon may go into business together may be one of the claims Golden Boy is making. Golden Boy might claim that Schaefer breached his fiduciary duty as CEO by not acting in the company’s best interests. The recent Main Events lawsuit filed against Al Haymon paints the picture that Schaefer and Haymon have worked together (more on this lawsuit in the coming days). The legal action is not surprising considering the public departure of Schaefer and other staff as well as Floyd Mayweather.
June 22, 2014
With the New York Assembly not voting on a bill to legalize pro MMA in the state, the focus turns to Zuffa’s lawsuit against the state. A court order issued late last week will allow the parties to file Motions for Summary Judgment by July 3rd.
The remaining cause of action left from Zuffa’s lawsuit filed back in November 2011 is the claim that the present law banning MMA in the state is unconstitutionally vague. The Court dismissed the previous claims upon New York’s Motion to Dismiss.
The parties have until July 3rd to file a motion which would dismiss the final claim and end the lawsuit if filed by New York. Zuffa has the option of filing its own motion which may leave an opening for a possible settlement.
Responses to the initial Summary Judgment Motions are due on July 17th with Replies to those Response Motions by July 31st.
H/t: Jim Genia
Spoiler Alert. There will be a Motion for Summary Judgment. The end to this lawsuit could be near. Or, we could be hunkering down for more briefing. Discovery has closed for all intents and purposes and if the Court is not persuaded to dismiss the lawsuit on New York’s Summary Judgment motion, we will be getting ready for a trial.
If you were wondering how long after the Court receives the papers will the Judge make a decision. The lawyerly answer to that is: it depends. But if you want some guidance. New York filed its Motion to Dismiss in October 2012, a hearing did not take place until February 2013 and the ruling was not issued until late September 2013. Thus, we could wait almost a year for a ruling. Hopefully, it may happen sooner. But, we may be through another legislative session in New York before a ruling.
MMA Payout will keep you posted.
June 20, 2014
Earlier this week, EA Sports released the latest UFC video game which includes many of your favorite UFC fighters including Carlos Condit. However, gamers may notice that Condit will not have the lion tattoo that is on the side of his body for legal reasons.
As the Wall Street Journal reports, the tattoo was removed from the video game as a precaution from infringing on any copyright issue that Condit’s tattoo artist may have with its use. Previously, Condit’s tattoo artist sued defunct video game maker THQ for the unauthorized use of the tattoo in UFC Undisputed. Long story short, Escobedo asked for millions, the Bankruptcy Court quantified the use to the sum of $22,500 (the amount Condit was paid for the use of his likeness).
The move to digitally airbrush Condit of his tattoo underscores a big issue the National Football League Players’ Association (and likely other leagues) is facing when it comes to player tattoos and digital rights. One of the ways to protect itself from lawsuits is to have players get their tattoo artists sign releases.
Authenticity is something that sports video games have and the inclusion of fighters’ facial features, hair style, mannerisms and even their tattoos are important. College football games have come under fire for similar issues and we may see the elimination of any identifiable feature your favorite college player may have in a game. But that issue is a little different from the one here. However, it is clear that If you are Carlos Condit, you might be concerned with the fact that your likeness is not exact, which may impact your overall future brand. That argument is a little far-fetched but the issue of re-imaging personas due to concerns about being sued is a slippery slope we may see in future video games.
June 9, 2014
With a week left in the 2014 legislative session in New York, it appears that Dana White’s comments a couple weeks ago were prophetic. A vote legalizing MMA in the state will not happen in the State Assembly this year.
UFC Vice President of Regulatory Affairs Marc Ratner confirmed to MMA Junkie Radio he doesn’t expect a vote this year. “…I would say it will not make it to the floor again (this year),” Ratner said of the bill which will be bypassed yet again after passage through the state senate.
Ratner indicated that he was “cautiously optimistic” about the possibility of a bill but also stated that, “I feel like the handwriting is in big block letters on the wall and we’re not going to get it done this year.”
Ratner went on to express the frustration of the ordeal which we may assume is felt by White and many other MMA supporters in New York.
Via MMA Junkie:
“I’ve been to (New York state capital) Albany 20 times throughout the past five years, and it’s just wrong. One of my biggest analogies would be, give us a turn at bat, and if we strike out, then it’s on us. But to never, never get a chance and have the leadership of the Democratic assembly look around the room and say, ‘Not enough interest this year, let’s talk about medical marijuana,’ that’s all we get. It never comes to a vote.”
Ratner indicated that they would need 76 of the 101 Democratic assembly members to have the MMA bill pass. Ratner says they have 60 sponsors and would need 16 more votes for passage. While the UFC appears to be softening the blow for what will be another empty legislative session, one has to wonder what else the UFC could do to facilitate a vote.
May 29, 2014
MMA Junkie reports on the UFC’s new policy of requesting its contracted fighters to sign a release of their personal information for background checks including details related to their medical, educational and criminal history.
As pointed out by Stephen Marocco’s piece, the request includes a waiver of “doctor/patient confidentiality” which circumvents HIPAA (Health Insurance Portability and Accountability Act) privacy laws. Essentially, Zuffa could discuss a fighter’s health history with a fighter’s medical provider.
According to the article, the information has been collected for several years but the new document encompasses all of the releases in one form.
There are obvious needs for the releases from the fighters. The UFC does not want to be surprised by any unknown criminal issues or associations such as Will Chope or Benjamin Brinsa. The health information is important because the UFC probably does not want to discover a pre-existing health condition which might preclude the fighter from fighting.
The Junkie article also talked to Sports Law professor Warren Zola about whether the release of information is standard for independent contractors. Zola indicated that while the request is “more than many employers would ask,” it was not illegal. Zola goes on to indicate that Zuffa’s leverage allows it to request the information and most fighters wanting to fight for the company must abide by its rules otherwise there’s the possibility that they may not work for the company. Only top-notch talent would have some bargaining power over these consents.
Overall, the request for information is a way that the UFC is trying to protect its brand. As it continues to grow and expand internationally, these new consents are a way to ensure that all of its bases are covered with its fighters so that it does not get blindsided with possible PR issues in the future.
If you read the article, you will find that Professor Zola uses the “M” word (he actually says “They have close to a monopoly…”) when talking about the UFC and its leverage to obtain these consents from its contracted workers.
May 1, 2014
The New York Post first reported that a New York man is being sued by Zuffa for alleged copyright infringement for pirating, uploading and distributing 141 UFC PPVs.
In a lawsuit filed on Tuesday in the United States District Court for the Eastern District of New York, Zuffa is suing Steven Messina and assorted unnamed individuals for copyright infringement among other causes of action as it relates to pirating UFC PPVs and uploading them to a web site for viewing. Zuffa alleges that the defendants received a financial benefit as a result of uploading the pirate PPVs.
Zuffa is asking for statutory penalties of $150,000 for each separate act of copyright infringement, up to $110,000 for each of the defendants’ use of UFC content, up to 60,000 for intercepting UFC content, attorney fees and unspecified punitive damages.
Adding up all the penalties, Zuffa would request $32 million plus attorney fees and punitive damages from the New York resident which the New York Post reports lives with his parents.
First thing is first. Forget about anyone getting $32 million. Even if the defendant did not show up and a judgment was entered in against him, Zuffa would still have to find this guy’s assets to collect. The fact he lives in the basement of his parents’ house should tell you it is not going to get it. So, it’s merely a number to intimidate. As for the story that the guy lives with his parents, it’s sad and not relevant to his alleged wrongdoing.
Does this make people hate Zuffa because it is suing someone allegedly stealing its PPVs? It should not but sentiment seems to be that this is a bad move for the UFC. Do some UFC fans want the option of stealing the occasional PPV when they don’t want to pay the $55 and suing these guys eliminates the option? Zuffa is protecting its copyright and while it may be overreaching in some cases, the accused perpetrator did more than just stream a PPV illegally.
MMA Payout will keep you posted.
April 29, 2014
Boxer Mikey Garcia has sued Top Rank Boxing for violations of the terms of its promotional agreement under the Muhammad Ali Boxing Reform Act and laws in the state of California. Garcia’s lawyers characterize the promotional agreement as making the boxer an “indentured servant.”
The lawsuit was filed earlier this month in Riverside County Superior Court in Riverside, California.
According to the lawsuit, “Garcia will demonstrate that Top Rank’s Promotional Rights Agreement violates numerous provisions of both California law and California’s strong public policy to protect California-based boxers from unscrupulous promoters and managers and from entering into improvident arrangement and is therefore unenforceable.” As for the violations of the Ali Act, Garcia’s attorneys state that Top Rank did not provide the required disclosures under the act which requires that Top Rank let Garcia know the amount of money it would make from each of Garcia’s bouts.
Garcia is a Super Featherweight out of Riverside, California. He is currently the World Boxing Organization’s champion. He signed a Promotional Rights Agreement before Top Rank represented him which Garcia’s lawyers contends it grants Top Rank the ability to extend the agreement indefinitely.
The promotional contract was entered on April 13, 2006 which gave Top Rank the exclusive right to promote Garcia’s services as a boxer. The terms of the Contract, which ran for 5 years, gave Top Rank the right to renew the terms of the agreement.
Garcia’s lawyers argue that Top Rank acted as Garcia’s manager which would be a violation of California law since it did not fill out the requisite forms to manage a boxer in California. This was similar to the problems faced in the Ronda Rousey-Fight Tribe arbitration.
The Complaint also alleges that Top Rank did not disclose the payments it received from Garcia’s fights which would be a violation of the Muhammad Ali Act. Specifically sec 6307e(b)(1)-(3).
Lawyers for Top Rank have downplayed the lawsuit calling it “baseless” and we will likely see them seek a dismissal of Garcia’s claims.
The promotional contract indicates that the jurisdiction is Nevada which may cause some procedural backlash by Top Rank. In addition, Garcia is suing based on the Ali Act, a federal law, which may cause another procedural issue related to removing the case to federal court.
It’s interesting to note that on HBO’s The Fight Game, the belief was that no one close to Garcia knew he was unhappy and that he was going to file the lawsuit. The inference is that there were no issues between Garcia and Top Rank.
I have not seen a fighter prevail in a case under the Muhammad Ali Act. While Garcia may have a valid claim, it’s likely that the lawsuit will precipitate a settlement with Top Rank or to sever ties with it.
MMA Payout will keep you posted.
April 10, 2014
Welcome to a special look at Wrestlemania XXX which took place at the Superdome in New Orleans, Louisiana.
Ultimate Warrior passes away
Perhaps the news of the death of Jim Hellwig (aka The Ultimate Warrior) has overshadowed the post-Wrestlemania news. Hellwig was inducted into the WWE Hall of Fame, made an appearance at Wrestlemania, signed a deal to be an “ambassador” for the WWE and appeared on television on the company’s signature show, Monday Night Raw. News broke late Tuesday night that he passed away in Arizona.
Similar to the passing of Randy Savage, the outpouring of condolences for the death of The Ultimate Warrior likely brought back fond memories of a person’s childhood for many that grew up watching him.
Attendance and gate
According to a WWE press release, it was a sellout with a gate of $10.9 million with 75,167 in attendance. Sunday’s event landed 5th in all-time Wrestlemania attendance.
For those in attendance, it may have been easier for fans to obtain unauthorized WWE merchandise as a Louisiana District Court denied the WWE’s motion to stop and confiscate bootleg merchandise from being sold in the area. An order like this is usually allowed as a way to protect the intellectual property of the company. However, the court decided it could not legally give the WWE this broad authority without identifying these potential infringers more specifically.
Don’t bet on pro wrestling
While we won’t necessarily get into the storylines from the night, it should be noted that The Undertaker’s win streak of 21 consecutive wins at Wrestlemania was broken by former UFC Heavyweight champion Brock Lesnar. While this was scripted, a gambling web site lost money on the fight as it expected that the WWE would not let the Undertaker lose. Fox Sports reported that the odds ranged from 14 to 1 and 8 to 1 for Lesnar to prevail. The maximum bet was $100 although some people were allowed to bet “as much as $500 on Lesnar.”
UFC hypes Lesnar
Not only was Brock Lesnar a part of Wrestlemania, but the UFC took advantage of the hype of the event by having the Rock (below), Jim Ross and Steve Austin talk about the former UFC Heavyweight champion. All of the videos were “Fight Pass Exclusives.”
WWE stock takes a hit
The day after Wrestlemania, the WWE announced its subscribers for the network. To the dismay of investors, it announced it had slightly over 667,000 subscribers which were below Wall Street expectations. While the WWE believes it will hit 1 million by the end of the year (the break-even point for the network), the stock fell almost 20% on Monday. At the end of trading Thursday, it is down to $21.12.
The WWE received a lot of mainstream hype for the 30th edition of the biggest professional wrestling event of the year. Most of this was focused on the new network and how it would fare airing such a heavily watched event. To its credit, the video stream had no noticeable hiccups which were a good sign for the future of the product. The question will be whether the negotiations for its rights deal will be affected in any way.
Payout Take: Although the stock is taking a drop, the broader takeaway from the event was that it did not suffer any tech issues which was a major concern considering the amount of problems it had when it first launched in late February. At least this shows that the product holds up. The next big test for the company is a rights fee deal which is anticipated to occur sometime late April/early May.